Emerging markets: full-service markets are finding a niche on campuses, serving the students, faculty, community, and creating profits for the school

University Business, March, 2005 by Alana Klein

Julia Jacobelli, a junior at George Washington University (D.C.), is a regular at her local market, often stopping in two to three times a day. Sometimes she goes for a piece of fresh fruit; other times it's to pick up the requisite college dinner: packaged pasta and canned sauce. So how does this busy college student find the time to do so much grocery shopping? Well, considering the nearest full-service market is just a three-minute walk from her on-campus apartment, the answer is: easily.

Jacobelli shops at District Market, GW's first full-service, on-campus supermarket. Conveniently located on the ground floor of GW's bustling student union, the DM boasts fresh produce, organic and kosher items, preprepared foods, a full deli, a bakery, a rotisserie station, an international foods aisle, an online grocery ordering service with free delivery, a DVD rental service, and health and beauty products.

"It sure beats having to walk to the Safeway two miles away," says Jacobelli. "When weather is bad, carrying heavy bags of groceries can really be a pain," she adds.

CATERING TO STUDENTS" SAVVY PALATES

Serving the entire on- and off-campus community, the 12,000-square-foot DM replaced a traditional 2,000-square-foot convenience store, which primarily carried dry goods. "There has been a natural evolution from the era of the convenience store--think ramen and Diet Coke--to the era of the small grocery store, where you can offer fresh produce," says Claudia Scotty, CEO of Envisions Strategies, a higher ed consulting firm. "Students are driving this evolution. They want fresh foods and they want them available in a variety of formats."

Aramark funded the $6 million project, which was completed fast September. After surveying more than 4,000 students, faculty, and staff to determine the market's viability, Aramark found that many people were keen on the concept. "The major question we had was: Just how much are students leaving campus to go shopping?" says Leanne Scott Brown, a spokesperson for Aramark. "We wanted to gage the demand for a store of dose proximity." It turns out that 49 percent of the students surveyed said they made regular visits to local grocery stores.

It's no surprise that GW's students are such avid grocery shoppers--of the 7,000 students who live on campus, 4,000 reside in apartments with full kitchens. "I think there's a certain niche for on-campus grocery stores," says Greg Billhardt, manager of the DM, who previously worked as an executive chef at Whore Foods Market. "It really depends on how many students can do their own cooking." Clearly, people at GW are doing a lot of cooking--about 75 percent of the on-campus population shops at the store, Billhardt says.

Aside from its ample population of cooking-savvy students, GW was a good supermarket candidate for other reasons. First, it met Aramark's residential population requirement, which states that a store can only exist if at least 3,000 students live on campus. But equally important was GW's willingness to take a risk on food service. "GW is extremely progressive in the way they want to serve their students," says Mark Walker, national marketing director for Aramark. "As it is, none of GW's dining services are realty traditional They don't have conventional dining halls or meat plans. This is just an extension of that."

Since its opening, students have gravitated toward the market's home-meat replacement section, boasting 16 feet of freshly prepared foods such as veggie salads, wraps, poached salmon, chicken cordon bleu, and sesame asparagus. It is in this section that Billhardt's Whore Foods background is evident.

"The clientele here is a bit more sophisticated. They understand what natural foods are--they're very health conscious," Billhardt says. "They don't want the typical Kraft macaroni and cheese." Organic food sales are up 33 percent from fast year and kosher foods sates increased by 42 percent. There are even kosher microwaves behind the deli counter.

"The success of DM has truly exceeded my expectations," Billhardt says. "Because this was my first time in a university setting, I didn't know what to expect. But this young clientele are realty open and witting to experiment with food."

CHARM 'EM WITH UNIVERSITY-BRANDED PRODUCTS

Brigham Young University (Utah) is another pioneer of the campus supermarket movement. In September 2001, it opened its Creamery on Ninth East, a 10,000-square-foot, stand-alone grocery store sporting 1950s decor. Originally built in the late 1950s, the store was originally an off-campus, small, family-owned grocery. That all changed four years ago when the university inherited the property. "It was almost going to be torn down and used as a parking lot," says Dean Wright, director of dining services at BYU. "But once everyone realized that the a sizeable student population lived in the apartment buildings across the street--many of whom didn't have private transportation to go the nearest grocery store two-and-a-half miles away--the grocery store idea started to make sense."